Skip Stein
Consulting Services

How to Save Companies Million$

(Or, how to modernize the business process.)

 

I have been an Information Systems Business Technologist for a long time and in the Information Technology business for over 40 years!  I have visited a wide variety of companies over the years and continue to be astounded at the waste and inefficiencies.

 

I would be willing to bet that I can go into just about ANY fortune 5000 company and save/make them a $100,000 a year (on a recurring basis!) in less than a week. If I don't offer at least this in additional profit/savings then just pay my expenses; no fee.   How you say? Impossible you state?  Nope, just simple observation and a bit of business process re-engineering.

 

I would just need access to the office/warehouse/distribution center and the mail room.  I would talk to the billing and accounts payable clerks.  Ask the financial accountant how they pay bills, interface with their banks and financial institutions.  How do they process orders (fulfillment), receive invoices/payments and do commerce?

 

As a nice segue, I would ask how the people I talk to pay their electric and water bills and if they shop on the internet.  Do they use PayPal? How about a debit card?   All these are now considered 'normal' means of monetary transfer for individuals.  All are paperless!  Yet the company copiers and printers churn out reams of mostly useless paper for interoffice use (don't count the countless fancy brochures that end up in the trash).

 

As most people have become familiar with the Internet, Email and other Web/Net enabled technologies, they also use cell phones, smart phones, digital cameras and a host of other digital recording and transmission devices that make our lives easier and hopefully, more efficient (cost effective).  All without the use of paper documents!

 

So, why do companies continue to churn out paper invoices, paper checks, spend thousand$ on postage to send paper through an antiquated and not so efficient postal system?  In most cases it is because “that is the way it has always been done.”.

 

Technologies exist and have existed for over 30 years to eliminate the need for most paper (memos, letters, invoices, checks, etc.).  In partnership with my mentor, John C. Booth at PMM&Co in Houston, way back in 1976, we published a trade journal accountancy article on the Paperless Office and how it would save countless dollar$ in a very short time. 

 

Back then, in the day of micro-fiche and lumbering mainframes it was all but impossible to easily manipulate and manage documents.  The biggest problem with micro-fiche was that you couldn't 'mark it up' or make notes in the margins.  Now with laptops, notepads, notebooks, e-book readers and cell phones, all with gigabytes of memory and the ability to not only mark up, but edit, annotate and add voice/video, those excuses have long gone stale.

 

Even the smallest companies have electronic commerce facilities available via PayPal, QuickBooks, and other accounting systems at little or no incremental cost; far less than the big copier/printer/fax machine down the hall.  There just isn't any excuse any longer!  These companies can easily receive/send electronic purchase orders, electronic invoices and many other electronic documents easily and cost effectively. Many are doing so now in order to do business with the 1000 pound gorilla big box stores!

 

So why do companies, especially in this slow economy, fail to take advantage of all the money just laying on the 'table'?  To be honest, I don't have a clue. 

 

While many companies do utilize electronic commerce in the form of electronic data interchange (EDI) for Purchase Orders and Invoices, they neglect to complete the business process cycle to include electronic monetary transfer and remittance reconciliation.  Part of the problem is the antiquated USA Banking systems that have failed miserably to update their technologies, charge ridiculous fees for 'wire transfers' and other electronic transactions, all the while embracing paper documents.

 

Most companies have ERP systems that they have paid million$ of dollar$ to acquire, install, train staff and implement.  How much of the imbedded functionality is being used to enhance business operations, increase profits and/or reduce expenses?  Are you connected to your banking systems directly (eliminating the need for manual bank account reconciliations), your suppliers (forecasting models, supply chain and alternative supply lines) and customers (invoicing, payments, etc.).  It is suprising how many companies still have manual or cludgy interfaces utilizing old style 'flat files' and file transfer protocols that are not automated and often not very secure.

 

Companies need to wake up and have their executives spend some time walking the floor!  Get out of the office and boardroom, get into the warehouse and distribution centers.  Talk to the people who make your company actually work and are enabling the profitable operations.  Executives, managers and other 'overhead' personnel do little actual work and often impede the real work trying to be done by imposing rules and regulations that are frequently little tested or validated as to their profit contributions.

 

Review and analyze how paper is shuffled around the organization.  Is the executive in the corner office having his secretary or 'executive assistant' print out his/her email because they don't know how to correctly use the email systems?  Stand near the copier and fax machine for a while sipping coffee.  Pay a visit to the mail-room!  What is being printed, faxed or copied?  Could it be done electronically if the proper instruction/education was done and the tools provided?  Do a cost-benefit analysis on the monster copier; what is the total cost of maintaining the beast?

 

There are thousand$/million$ of dollar$ waiting to be saved.  If you don't want to do it, call a decent management consultant who specializes in office automation, electronic commerce and business process re-engineering!  Many may do the work for free; but charge a percentage of the annual savings!

 

These dollar savings can be re-invested in the Information Technologies that will benefit the overall business process automation and contribute directly to the PROFITABILITY of the company.  Heck, it will even save a few thousand  trees and millions of gallons of water!

 

Skip Stein

Management Systems Consulting

http://msc.skipstein.com